Distributors Survey 2014

Distributors Survey 2014

The definitive report on the UK distribution sector

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Big has benefits… enabling larger investment, influence and market ‘clout’. But without the personal touch, it can be a one-sided affair.

In recognition of this we’re delighted to receive our second Queen’s Awards for Enterprise: International Trade this year.

We’ve been growing and evolving alongside the global broadcast landscape – yet we still hold true to our core values, of offering a bespoke sales and marketing service for each show on our slate.

So if you have a programme with international potential and want a distributor with scale and personality (and fur and claws?) – please contact our Acquisitions team:

We know that every one of the producers we represent has big ambitions internationally – and we see it as our job to nurture those aims.

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Contents Leader 4

12

16

The global challenge For the past few years, Broadcast’s Distributors Survey has charted how the British distribution business has become less and less British. Confirming this trend, 2014 shows that more of our companies are foreign-owned than ever before and a larger share of their slates is created outside of the UK. This year, non-UK content represents more than 50% of the total slate for 11 of our companies, and many of the remainder are shifting significantly in this direction.

This isn’t necessarily a bad thing. It confirms the UK’s status as a global hub for the distribution business, and it has typically translated into increased revenues.

But the trend certainly deserves deeper analysis. In the same way that critics of the English Premier League argue that its international success has been bad for young English football talent, maybe we need to investigate whether the globalisation of our distribution business is a long-term threat to the integrity and diversity of British-originated creativity.

The other striking theme in this year’s survey is the rapid rise of SVoD players such as Netflix and Amazon. Nine of our companies are now deriving 10% or more of their revenues from digital platforms – and at All3Media International and BBC Worldwide, it’s nearer 20%.

Is this level of business sustainable – or is it being inflated by the kind of heightened demand that is always evident during launch periods?

Once the SVoD players work out what their customers want, they could become more selective about what they buy.

There’s a lot more that needs to be worked out with regard to the windowing and exclusivity of content. But perhaps a bigger immediate issue is volatility in the international market. With deflationary pressures in the eurozone, unrest in the Middle East and on the Russia/Ukraine border, it will be interesting to see how our distributors fare next year. ➤ Andy Fry, supplement editor

Contents 4 Overview The battle for rights is putting the squeeze on mid-sized distributors, but the sector as a whole is growing.

12 Trends US-led consolidation is making life increasingly difficult for UK distributors, while SVoD services create opportunities and challenges.

16 Peer Poll Shine International tops our peer poll for the second year running, beating BBC Worldwide into second place.

A note on methodology To be included in the survey, companies need to be key players in the UK distribution market, selling their own or third-party product. They must be UK-based or with a sales team based in the UK. Companies must state distribution financial turnover in their responses. Participants are ranked based on distribution turnover for the year to April 2014 or their latest financial year. Our thanks to all the companies that took part this year.

If you’d like to be included next year, email robin.parker@emap.com.

Broadcast Editor Chris Curtis Supplement Editor Andy Fry Features Editor Robin Parker Production Editor Dominic Needham Group Art Director, Media Peter Gingell Senior Commercial Director, Media Alison Pitchford Sales Manager Sonya Jacobs Business Development Director Patricia Arescy www.broadcastnow.co.uk

26 September 2014 | Broadcast | 3

Distributors 2014 Overview

Caught in the

squeezed middle

With total revenues up 5% to £1.16bn, it was a strong year for the big distributors and smaller specialists, but mid-sized firms fared less well as the battle for rights intensified. Andy Fry reports

T

he British distribution business continues to grow. Despite significant upheaval in ownership, senior management and rights windowing arrangements, Broadcast’s Distributors Survey 2014 shows that the sector grew 5% year-on-year to post revenues of £1.16bn for the last financial year.

As with the 2013 survey, the top five firms generated the majority of revenues. With combined turnover of £874.1m, they are responsible for 75% of the table’s total.

The key drivers of growth in the 2014 survey are Endemol Worldwide Distribution (EWD), up 15.5%, and Shine International, up 27%. But the

most profitable Company

Passion Distribution Content Media Beyond Distribution TVF International 3DD Entertainment TCB Media

Profit

£4.70m £3.40m £1.49m £0.87m £0.30m £0.17m

Note Table only includes companies that revealed profits

Sherlock: BBCW 4 | Broadcast | 26 September 2014

‘New customers create new sources of revenue and, with creative windowing, we have the chance to amplify the value of our content’ Paul Dempsey, BBCW

results are also boosted by the return of Sky Vision and strong performances among smaller firms such as TVF International, Twofour Rights, TCB Media and Argonon.

BBC Worldwide continues to top our table by some margin, though its revenues are up just 0.5% to £313.7m.

BBCW global markets president Paul Dempsey declares himself happy with that figure, however, pointing out that BBCW has been adversely affected by currency fluctuations. “The under­ lying growth is nearer 4%, which for a company of our size is a pretty satis­ fying performance.”

BBCW is 18 months into a corporate restructuring that Dempsey says has brought the business closer to its markets: “Regional accountability means we are more connected with our customers, and that is starting to pay off in markets such as China, Brazil, Mexico, Poland and South Africa.”

Notably, 17% of BBCW’s revenues come from digital distribution, with the sale of content to SVoD platforms the biggest digital revenue driver.

According to Dempsey: “New

Gracepoint: Shine

£874m

The revenue generated by the top five companies in the survey – accounting for 75% of the table’s total customers such as Netflix and Amazon create new sources of revenue and, with creative windowing, we have the chance to amplify the value of our content. With increased outlets, we can find exactly the right home for content, allowing us to have more hits.”

Strong performances Fremantle Media International’s (FMI) 3.1% growth to £215.9m is modest by its own recent high standards. But strong performances from its American Idol and X Factor US franchises confirm its status as the undisputed number two in our chart.

FMI acting chief executive Bob McCourt, who is minding the hotseat until Jens Richter takes over, says slower growth has been an inevitable ➤

Duck Quacks Don’t Echo: Sky Vision www.broadcastnow.co.uk

For all the latest breaking news, updated daily, visit www.broadcastnow.co.uk

THE UK’S TOP DISTRIBUTORS Company

Distribution turnover to April 2014

Distribution turnover to April 2013

% change

Pre-tax profit to April 2013

Value of international prog sales to April 2014

Value of domestic prog sales to April 2014

Top-selling programmes include

Hours of programming in catalogue

% of catalogue from third-party producers

1

BBC Worldwide

£313.7m

£312.3m

1.0%

n/a

£240.2m

£73.5m

Doctor Who; Top Gear; Sherlock

53,100

28%

2

Fremantle Media International

£215.9m

£209.4m

3.1%

n/a

£142.0m

£73.9m

American Idol; X Factor USA; Save With Jamie

20,000

75%

3

ITV Studios Global Entertainment1

£135.0m

£136.5m

-1.1%

n/a

n/a

n/a

Mr Selfridge; Poirot; Hell’s Kitchen USA

40,000

n/a

4

Endemol Worldwide

£134.5m

£116.4m

15.5%

n/a

n/a

n/a

Hot In Cleveland; Wipeout; The Crimson Field

32,000

50%

5

Shine International

£75.0m

£59.0m

27.0%

n/a

£72.5m

£2.5m

The Bridge; Gracepoint; MasterChef

4,780

41%

6

All3Media International5

£49.0m

£47.0m

4.3%

n/a

£39.9m

£9.1m

Midsomer Murders; Undercover Boss; Miss Fisher Murders

6,750

23%

7

Zodiak Rights1

£48.0m

£53.0m

-9.5%

n/a

£45.0m

£3m

So You Think You Can Dance?; The Returned; Being Human

20,000

49%

8

Cineflix Rights2

£46.5m

£41.5m

12.0%

n/a

£43.0m

£3.5m

Copper; Food Factory; William Shatner’s Weird Or What

3,770

51%

9

Passion Distribution2

£23.4m

£22.0m

6.3%

£4.7m

£22.0m

£1.4m

Klondike Gold Fever; Selling Houses; Dynamo: Magician Impossible

8,000

85%

10

Digital Rights Group

£20.2m

£23.3m

-13.3%

n/a

£16.3m

£3.9m

Doc Martin; Never Ever Do This At Home

11,550

100%

11

Sky Vision4

£20.0m

n/a

n/a

n/a

£18.6m

£1.4m

Fortitude; Doll & Em; Duck Quacks Don’t Echo

3,890

80%

12

Content Media

£17.0m

£17.5m

-2.8%

£3.4m

£15.0m

£2m

Line Of Duty; Halo 4; Forward Unto Dawn; Streetfighter

4,000

45%

13

Beyond Distribution

£11.1m

£13.6m

-18.5%

£1.5m

£10.3m

£0.9m

Mythbusters; Highway Thru Hell; Love It Or List It

4,000

55%

14

Electric Sky2

£9.8m

£10.9m

-10.1%

n/a

£6.7m

£3.1m

How Cities Work; Lava Land; Webcam Girls

2,500

100%

15

Optomen Television3

£9.4m

£9.8m

-4.0%

n/a

£7.8m

£1.6m

Gordon’s Ultimate Family Cook Course; Kitchen Nightmares

1,918

5%

16

TVF International

£8.6m

£7.7m

11.6%

£0.9m

£7.9m

£0.7m

Special Forces; Secrets Of The Universe; World From Above

2,000

100%

17

Hat Trick International

£4.8m

£4.9m

2.3%

n/a

£4.5m

£0.4m

Episodes; George Clark’s Amazing Spaces; Great British Garden Revival

721.5

39%

18

Power Entertainment

£4.0m

£3.9m

2.0%

n/a

£3.9m

£0.1m

Air Force One Is Down; Predator’s Playground

1,250

90%

19

Twofour Rights1

£4.4m

£3.2m

37.5%

n/a

£3.1m

£1.3m

Born To Kill; Harry’s South Pole Heroes; Posh Pawn

500

5%

20

3DD Entertainment

£2.6m

£3.1m

-16.0%

£0.3m

£2.2m

£0.4m

Movie Talk; London Live; Discovering Series

700

5%

21

TCB Media5

£4.1m

£2.2m

83.0%

£0.2m

£3.7m

£0.4m

World’s Most Extreme: Age Gap Love; Bondi Rescue

450

100%

22

Argonon International1

£1.8m

£1.0m

80.0%

n/a

£1.5m

£0.4m

Baby With A New Face; Botched Up Bodies

2,100

20%

23

DLT Entertainment1

£0.5m

£0.8m

-33.0%

n/a

£0.2m

£0.4m

My Family; Reservoir Hill; As Time Goes By

920

75%

Notes All figures are for year end 31 March 2014 unless otherwise stated. n/a: Refers to an entry where figures were not provided. Where figures were supplied in foreign currency, these figures have been exchanged into sterling at the rate applicable at the company year-end. 1 Turnover for Argonon International, DLT Entertainment, DRG, ITVS GE, Twofour Rights and Zodiak Rights is to 31 December 2013 (previous year figure is to 31 December 2012); 2 Turnover for Cineflix Rights, Electric Sky and Passion Distribution is to 30 September 2013 (previous year figure is to 30 September 2012); 3 Turnover for Optomen Television is to 31 August 2013 (previous year figure is to 31 August 2012); 4 Turnover for Sky Vision is to 30 June 2014 (no previous year); 5 Turnover for All3Media International and TCB Media based on projections including signed deals

www.broadcastnow.co.uk

26 September 2014 | Broadcast | 5

Distributors 2014 Overview ARE YOU MORE CONFIDENT THAN LAST YEAR? 5%

5%

90%

Yes

No

Same

outcome of increased competition for rights and the malaise in the global economy. “On a more positive front, our evergreen drama franchises, such as Merlin and Neighbours, are doing well in the SVoD market,” he says.

“And we’ve benefited from paying more attention to certain regions.

We’ve made a deeper dive into markets such as the Middle East, Russia and sub-Saharan Africa.”

£75m

Shine’s 2014 revenues were up from £59m in 2013 ITV Studios Global Entertainment’s revenues are down slightly on last year (-1.1% to £135m). Despite this, it is generally acknowledged to have improved its performance in recent years.

Its top-performing title of the year was Mr Selfridge, part of an investment in drama that continues with the launch of David Duchovny drama Aquarius at Mipcom.

Like FMI, ITV GE has prioritised Nordic drama and will take Swedish titles Angelby and Jordskott to Cannes.

With ITVS GE’s revenues slipping slightly, EWD is within a whisker of overtaking it (up 15.5% to £134.5m).

Titles such as Hot In Cleveland, Wipeout and The Crimson Field performed well, says EWD chief executive Cathy Payne. “Distribution is a strong business for companies with the right product. Broadcasters will pay for shows that define their schedules, but they’ll pay a lot less for those in the rest of their schedule.”

A lot of EWD’s current investment is in US drama such as Kingdom, 6 | Broadcast | 26 September 2014

The Pinkertons: Zodiak

Kingmakers and Hell On Wheels.

But Payne says there is still a significant role for British content. “It has been performing very well across the past year,” she says. “It is considered innovative and the British broadcasting world still allows for creative risk-taking.”

Shine’s revenues have risen to £75m, up from £45m two years ago.

For chief executive Nadine Nohr, this exceptional performance is all down to “content and monetisation”.

She says: “To succeed, you need great shows and the expertise to manage them. Our skill is taking shows such as The Bridge, Gracepoint and MasterChef and coming up with the most effective strategic plan for them.”

The next firm down in terms of size is All3Media International, whose parent group was recently swallowed up by a joint deal between US media giants Discovery Communications and Liberty Global. It’s too early to speculate on the distributor’s future, but the company can congratulate itself on a 4.3% rise in revenues to £49m. It has increased drama investment and bought more content from outside the UK. All3Media International has leapfrogged Zodiak Rights, which recorded a 9.5% drop in revenues from £53m to £48m, following a drop of 2.2% the previous year.

‘to succeed, you need great shows and the expertise to manage them. our skill is taking shows and coming up with the most effective strategic plan for them’ Nadine Nohr, Shine

biGGeSt iNCreaSe iN reVeNUe Company

TCB Argonon Twofour Shine International EWD Cineflix TVF International

% change

Revenue 2014

Revenue 2013

83.0% 80.0% 37.5% 27.0% 15.5% 12.0% 11.6%

£4.1m £1.8m £4.4m £75.0m £134.5m £46.5m £8.6m

£2.2m £1.0m £3.2m £59.0m £116.4m £41.5m £7.7m

Zodiak Rights chief executive Steve Macallister took over in January 2014. Referring to 2013 as “a challenging year”, he says a number of senior appointments have been made with a view to improving revenues, notably head of digital, business development and insight Gary Woolf, and head of scripted Caroline Torrance.

“We see this year as a transitional one while we identify the new revenue opportunities that are emerging for us,” Macallister says.

Given Zodiak Media’s strong presence in Europe, its distribution arm continues to score with drama from the UK, France, Scandinavia and Italy. But it is also investing in the US and Macallister is excited about The Pinkertons, a 22-episode action-adventure series that explores the origin of the famous detective agency in the 1860s.

In the transition from RDF to Zodiak, it is noticeable that third-party content’s share has dropped and the company’s slate has moved towards non-UK content. But Macallister says his desire to work with British indies is undiminished: “We have a number of first-look deals with indies and a strong development budget. The fact that we are now the largest non-aligned producer/distributor in Europe is an asset, and we have a strong track record in account feedback.”

factual entertainment Amid the activity at the top of the table, it’s easy to overlook Cineflix Rights.

With revenues up 12% to £46.5m, it now sits on the shoulder of Zodiak Rights and All3Media International, despite its smaller programme catalogue of 3,770 hours.

Factual entertainment programming continues to be the engine room of Cineflix’s sales operation, with true crime and property shows still in demand, but it is also building a presence in scripted, says chief executive Chris Bonney. “Our top-selling show in 2013 was Copper and we expect scripted to be represented even more strongly in our revenues next year,” he says. “That’s because of our joint venture with drama producer Buccaneer, but also because of Secrets & Lies, our acquisition from Australia.”

Bonney says firms of his size face two big challenges: increased consolidation on the content side of the business is sucking more indies into large producer/distributors, while international ➤ channels are being increasingly www.broadcastnow.co.uk

KEEP CALM AND

GET RESULTS A distributor you can depend on.

Contact our team at acquisitions@cineflix.com

cineflixrights.com

Distributors 2014 OVERVIEW MOST NON-UK CONTENT IN CATALOGUE Company

% of catalogue content

Hours of catalogue content

Power Cineflix Beyond Shine FMI EWD Content

85% 81% 80% 76% 70% 70% 70%

1,062.5 3,054 3,200 3,633 14,000 22,400 2,800

MOST UK CONTENT IN CATALOGUE Company

Hat Trick International Twofour 3DD BBC Worldwide Optomen Argonon

% of catalogue content

Hours of catalogue content

100% 100% 100% 98% 95% 85%

721.5 500 700 52,038 1,822 1,785

ARE YOU CONCERNED ABOUT CONTINUED VOLATILITY?

36%

64%

Yes

No

‘As deficit funding has become more important for primetime shows, we are working with producers at an earlier stage of development’ Jane Millichip, Sky Vision

aggressive. “Our response has been to increase our acquisition activities,” he says. “We’re engaged in more firstlook and development deal activity to secure new content.”

After Cineflix Rights, there’s a big drop to Passion Distribution, with revenues of £23.4m. Passion has grown rapidly since its 2008 launch and, since becoming part of Tinopolis at the end of 2012, has established itself as one of the UK’s leading distribution outfits. Chief executive Sally

MOST RELIANT ON THIRD-PARTY PRODUCER CONTENT Company

DRG Electric Sky TVF TCB Power Passion Sky Vision

% of catalogue content

Hours of catalogue content

100% 100% 100% 100% 90% 85% 80%

11,550 2,500 2,000 450 1,125 6,800 3,112

8 | Broadcast | 26 September 2014

William Shatner’s Weird Or What: Cineflix

Miles is happy with a 6.3% rise in revenues at a time when, she says, “consolidation makes access to content more difficult”.

While Tinopolis gives Passion access to a bigger pipeline of UK productions, Miles’ firm does well with shows it has picked up through exclusive deals with US cable channels, including the Oprah Winfrey Network, Sundance Channel and Weather Channel. Its top-selling title, Klondike Gold Fever, originally aired on History Channel Canada.

Slowing acquisitions At £20.2m, Digital Rights Group’s revenues are down 13.3% year-onyear. But this can be attributed largely to a slowdown in acquisition activity, as Ingenious Media Active Capital went through the process of selling DRG to Scandinavian media firm Modern Times Group (MTG). Anyone familiar with the size and scale of the MTG business will know it is only a matter of time before DRG returns to growth.

Sky Vision is next in our table with revenues of £20m. Formed following the acquisition of Parthenon Entertainment, Sky Vision took a year off from the survey last year while it reorganised. It has emerged with revenues that have virtually doubled compared with the £11m it filed in 2012.

And there is more to come, says new managing director Jane Millichip: “Being part of a broadcaster with big ambitions benefits us when it comes to acquisitions. As deficit funding has become more important for primetime shows, we are working with producers

at an earlier stage of development to devise strong series.”

Echoing her peers, Millichip says she has a big emphasis on scripted shows such as Sky Atlantic’s upcoming Fortitude, but stresses the importance of a diversified catalogue.

“We have done well with shows such as Doll & Em [Sky Atlantic] and Duck Quacks Don’t Echo [Sky 1]. We’re also very excited about Sky’s recent acquisition of Love Productions, which will open up new opportunities with indies.”

Take Sky Vision out of the equation and it’s noticeable that most of the companies in the £10-20m range

£20m

The revenues achieved by Sky Vision in 2014 are virtually double the £11m recorded in 2012 report drops in revenue for the past financial year. The key reason for this ‘squeezed middle’ seems to be a combination of greater competition for fewer rights and reduced demand in some parts of the eurozone, notably Spain, Italy, Greece and France.

Some companies also cite the timing of deals as an issue, with peaks and troughs in revenues down to whether a deal is signed off at the end of one financial year or the start of another.

With revenues of £17m, Content Media chief executive Greg Phillips says the overall picture at his firm is healthy. “Line Of Duty has been a big seller for us and we have a strong ➤ www.broadcastnow.co.uk

Distributors 2014 Trends

US firms flex their muscles US-led industry consolidation is making life increasingly difficult for UK distributors, while the rise of SVoD services provides both challenges and opportunities. Andy Fry reports

C

hannel 4 chief executive David Abraham used his MacTaggart lecture at last month’s Edinburgh International Television Festival to highlight the growing influence of US media companies on the international stage.

While his primary focus was on domestic broadcasting and commissioning, the companies in question are also causing seismic shifts in the distribution business.

With Liberty Global buying a stake in ITV and partnering Discovery Communications to buy superindie All3Media, it is possible that, within three to five years, the only Britishowned distributors in the top half of our table will be BBC Worldwide (BBCW) and Passion Distribution.

The next-highest Brit-owned distributor is Electric Sky in 14th spot.

This isn’t the only way in which US companies are extending their control of the international content business.

In parallel, the likes of Viacom, A+E Networks, AMC Networks, Scripps Networks Interactive and Discovery (again) are aggressively expanding their international channel businesses.

The significance of this is that these companies – alongside channel operators such as SPT, Fox International Channels and NBC Universal – are trying to hold on to programme rights to feed these beefed-up services.

As one leading distributor observes: “The increasing and rapid expansion of the big-brand cable channels across territories means they require greater global rights in their commissioning deals, leaving fewer territories and rights available for producers and distributors to recoup their deficits and generate profits.” Another notes how “more and more vertical integration is narrowing the opportunities to secure original programming”.

Alongside this consolidation of power, the other big story is the rise of SVoD players. With Netflix making a full-scale assault on the European market, UK distributors are reporting sizeable increases in the revenues they generate from this sector.

12 | Broadcast | 26 September 2014

Gogglebox: All3Media International

‘We need to be more skilful and scientific about how we manage value across windows’ Paul Dempsey, BBCW

BBCW, for example, now estimates that 17% of its sales revenues (about £53m) comes from digital platforms, mainly SVoD. In terms of the implications of this, BBCW global markets president Paul Dempsey says: “Our job is to serve audiences, so our content needs to be wherever they are.

We need to be more skilful and scientific about how we manage value across windows.”

At a superficial level, the rise of SVoD platforms goes some way towards offsetting the increased muscle being exerted by the mainstream channels. But the challenge for distributors is how to extract value from these new players without alienating the traditional channels.

When this point is put to them, distributors emphasise smart windowing of content – but that’s easier said than done. As one observes: “Some TV broadcasters licence all rights to protect themselves from potential digital competitors, even if they are not exploiting them on online themselves.

“Increasingly, this is a contractual necessity to comply with platform/ carriage agreements. We will see this

more as they compete with SVoD players for the same audiences.”

While the general view is that digital means extra revenues, there are caveats. One company warns of “low licence fees and a large cost of delivery, so it doesn’t always make economic sense”. Another says: “There are hidden costs in doing these deals from an operations and marketing perspective, with VoD platforms often needing a higher level of support in terms of collateral per episode than broadcasters need for a series.”

Hidden costs There are similar concerns around the effect of increased download-toown revenues on traditional retail home entertainment distribution.

Likewise, says one distributor: “More revenue opportunities from new clients can mean a dilution of existing revenues as traditional licence fees are squeezed.” And then there’s the revenues lost to piracy.

In terms of content, every one of the big companies in our table identifies drama as a priority. Echoing many of his counterparts, Fremantle Media International acting chief executive ➤ www.broadcastnow.co.uk

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World Productions for BBC One

LA Productions for BBC One

The Indian

Doctor

Content Media, one of the few truly independent British distribution businesses, specialises in combining great commercial and creative talent. We are extremely proud to represent so many of Britain’s exceptional producers and production companies.

Contact our Acquisitions department to find out how Content Television can help provide you with a dedicated distribution partnership suitable for your programming at info@contentmediacorp.com or visit www.contentmediacorp.com.

Distributors 2014 TRENDS

Dynamo: Magician Impossible: Passion Distribution

Bob McCourt says his firm is expanding aggressively into drama.

“We have a big slate coming through, including titles such as The Returned and American Gods,” he says.

“We’ve also acquired Danish production company Miso. And on the UK front, we’re expecting great things from Kate Harwood, who was brought in to run our high-end drama production company Euston Films.”

Risk and reward It’s a similar story at Sky Vision. “The appetite internationally for highquality, long-running drama is high, and it is still growing,” says managing director Jane Millichip. “So we are investing in high-quality, high-profile and volume drama where, despite high risks, the potential returns on investment are bigger.”

If there’s a problem with drama, however, it is the significant resource required to compete. Not only are UK distributors competing for rights with US companies, but they also face a growing challenge from the likes of StudioCanal, Red Arrow International and eOne. This is why most of the smaller distributors surveyed are positioned as factual and factual entertainment specialists. If, in due course, a US firm buys ITV, BBCW might be the only British-owned distributor capable of competing for high-end dramas.

In terms of broader programming trends, Passion Distribution’s Sally Miles gives this assessment of the market: “Mainstream primetime is ever more demanding. Content needs to stand out as an event in the schedules and pull the audience in, whether that be drama, Saturday night entertainment or a sporting event. As a result, Passion is investing in programming that will stand out and 14 | Broadcast | 26 September 2014

‘It is becoming harder to place content that falls into the middle ground and doesn’t have a clear identity or known talent’ Sally Miles, Passion Distribution

wide, and then monetise that as have the potential to become a longadvertising revenue. Revenues in running brand.” isolation can be small, but become She adds: “It is becoming harder to place content that falls into the middle more significant when you view your channels as a global network.” ground and doesn’t have a clear idenOne major benefit of this model is tity or known talent”. that it can monetise a youth audience But there is, she says, an opportuthat is spending less time watching nity for volume shows on small chanlinear channels. nels: “Niche channels with a loyal Issues such as corporate consolidaaudience cannot afford to change tion and big drama deficits have led a their offering/schedules. This pronumber of distributors to explore vides a known variable, so it is easy to alternative opportunities for growth. identify content that would be ‘on brand’ and work for them. You have to One that crops up a lot is formats. keep in mind, though, that this is a lower fee-paying environment.”

New formats Most distributors say that longContent Media chief executive Greg form programming on SVoD is the Phillips says growing formats is a big opportunity in digital. But there strategic priority for his company: is plenty of evidence to suggest “Working in close partnership with that young audiences are [format distributor] Small World IFT, spending more time viewing we have identified this genre short-form content on as one to actively develop broadband and mobile and build on. Small World platforms. Asked has already announced a whether this is ever number of significant Share of Content likely to emerge as a deals this year and there Media’s total distribution currency, a will be more ahead revenues that came few companies make of Mipcom.” from digital positive noises.

Formats appeal to Content Media, which distributors because they generates 20% of its revenues can generate significant from digital, says: “Short-form rewards in return for relatively low content is an opportunity and we levels of risk. Plenty of shows have have been licencing a plethora of started life on small digital channels, content to new online platforms. or in daytime slots, and gone on to be In 2014, we have observed a shift in significant international hits. For disthe acquisition patterns related to tributors, the attraction is format short-form. We see it as value-adding licencing fees and greater exposure content used to complement ‘tradifor their company brand in the intertional’ long-form launches.” national marketplace.

Other companies agree that shortOf course, the formats sector is form is growing in importance, but not ferociously competitive. And as one necessarily as a classic distribution distributor points out, channels are play. “Endemol has become active in reluctant to replace existing shows this world,” says Endemol Worldwide with new concepts: “There is still riskDistribution chief executive Cathy aversion from buyers, especially in the Payne. “The model is different in that formats business, where established we look at the total views generated broadcast success, ratings and reviews across the Endemol network worldcontinue to de-risk decision-making for buyers and help them sell format TOP INVESTORS IN DEVELOPMENT ideas into their own networks.”

Company Total annual spend Another area that still seems to catch distributors’ attention is kids, DRG £3.5m where the ultimate goal is a big BBCW £2.0m payback in licensing and merchandisFME £2.0m ing (L&M). In reality, however, kids’ Passion £2.0m content involves a massive upfront Sky Vision £2.0m investment in production with very Zodiak £1.5m little likelihood of L&M success.

All3Media £1.0m To make matters worse, a lot of Cineflix £0.5m kids’ rights-holders are forced to Beyond £0.2m licence their shows for very low fees Power £0.1m simply to get the exposure required DLT £0.1m to kick-start L&M.

20%

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Entertaining…

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Distributors 2014 Peer Poll

Shine stays top of the pile Shine International tops our peer poll for the second year running, holding off BBCW with a strong drama slate that includes Gracepoint and Grantchester. Andy Fry reports 1 Shine International 16%

As in previous years, a wide range of distributors picked up votes in our peer poll. Non-UK companies nominated this year include Lionsgate, EOne, HBO, Off The Fence and Keshet International. In the UK, there were votes for Fremantle Media International, Optomen, Passion, Hat Trick and Content, but not enough to get them onto our list. As always, the peer poll was a closely fought contest, and the companies that secured the most votes are listed here.

For the second year running, Shine International has topped our peer poll. One company that voted for the distributor said it had “reinforced its commitment to third-party producers as well as continuing to churn out mega-brands from the parent group”.

As explained in our overview, Shine’s revenues rose 27% to £75m in the last financial year. Chief executive Nadine Nohr says: “We put a lot of effort and resource into building partnerships and getting our windowing right. We have con­tinued to invest in our distribution infrastructure, including our genre expertise, growing our sales team on the ground in key markets and boosting our digital resource.”

Shine has concentrated on scripted and will continue to do so. Aside from Gracepoint, the US adaptation of Broadchurch, it has BBC1’s Distribution revenue if Shine merges Our Girl, ITV’s upcoming with Endemol and Grantchester and AustralCore Media ian drama Catching Milat on its Mipcom slate.

This is the way to boost revenues, says Nohr, but it can be a doubleGrantchester: Shine International edged sword: “The increased number of drama buyers has pushed up prices.

But budgets are increasing, meaning the demand to deficit is greater.”

Shine’s revenue puts it in the number five spot in our table, but Nohr says: “We don’t think of ourselves as one of the big guys. We don’t really have a volume approach to selling.”

That view might have to change if the merger of Shine Group, Endemol and Core Media goes through, as proposed

by Shine owner Fox and Endemol/ Core owner Apollo, which would run the enlarged unit as a joint venture.

Neither Nohr nor Endemol Worldwide Distribution (EWD) chief executive Cathy Payne would comment on their plans, but if a merger does take place, there is scope for EWD and Shine International to form a single distributor with revenues of £200m-plus.

That would put it on a similar footing Happy Valley: BBCW to rival Fremantle Media International.

£200m

16 | Broadcast | 26 September 2014

2 BBC Worldwide 11%

The range and depth of BBC Worldwide’s (BBCW) catalogue, coupled with the effectiveness of its sales and marketing machine, makes it a fixture of our annual peer poll.

Rivals are not shy about applauding the strength of the company’s catalogue and the quality of new British shows coming through.

BBCW’s top properties for the year in question were Doctor Who, Top Gear and Sherlock, but BBC Worldwide global markets president Paul Dempsey says that just scratches the surface of the company’s 53,000hour portfolio.

Looking to the future, he says: “We’re very excited by our natural history pipeline, which includes One Planet. And we’re continuing to invest in drama, with titles like Happy Valley, Banished and Intruders, a co-production between BBC2 and BBC America from BBC Worldwide Productions.”

While the quality of BBCW’s content is a major part of the com­ pany’s success, Dempsey says a lot of effort is going into improving its operational skills: “We’re investing £5m in our international sales force to boost global effectiveness – on new systems, marketing, customer relationship management tools, data and research capabilities for teams around the world. We are also taking an increasingly sophisticated approach to windowing and will continue to seek out new clients, especially in digital.”

On the subject of industry consolidation, Dempsey is unperturbed: “ConsoliInvestment BBCW is dation of content supply making in its could at first glance international sales appear to be a problem, force to boost global but we find that as one effectiveness door closes, another opens.

Mega-consolidation invariably means creative individuals become available, and this gives us the opportunity to nurture voices and invest in ➤ new partners.”

£5m

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Voted

#1

Distributor Broadcast Magazine Peer Poll 2013 & 2014

shineinternational.com

Shine4ShowAdvert_Broadcast_AW.indd 1

19/09/2014 19:43

Distributors 2014 Peer Poll to Payne, this emphasis on drama is set to continue. “There are more buyers for scripted than ever,” she says. “In addition to the SVoD platforms like Netflix and Amazon, there are more and more cable channels wanting signature shows.”

That said, Payne believes demand for UK factual product remains healthy. “The UK market has a good reputation for making entertaining shows that have a good level of integrity – shows like C4’s The Sex Education Show.

Some other markets tend to be more sensationalist with factual.”

3 ITV Studios Global Entertainment 10.5% Though ITV Studios Global Entertainment’s revenues are down slightly on last year (-1.1% to £135m), it is generally acknowledged to have improved its performance in recent years. The top-performing title of the year was Mr Selfridge, part of an ongoing investment in drama.

ITVS GE has placed a lot of emphasis on North American drama, picking up the rights to titles including Texas Rising, The Good Witch, Rectify and Canada’s Schitt’s Creek. Like FMI and Zodiak, it has also prioritised Nordic drama and will bring Swedish titles Angelby and Jordskott to Cannes.

While ITVS GE has invested heavily in building up its non-UK drama slate, it continues to do good business with homegrown dramas such as Poirot, Morse, Lewis, Endeavour and Vera. Underlining its ongoing commitment to homegrown scripted shows, it will also unveil the Poldark reboot at Mipcom.

Outside drama, non-scripted shows like Hell’s Kitchen continue to work well. This part of the business may get a further boost in the future. In May, ITV acquired 80% of US factual producer Leftfield Entertainment (Pawn Stars, Real Housewives Of New Jersey) for $390m (£240m). There’s a strong possi­bility this will reinforce ITVS GE’s unscripted slate.

4= All3Media International 6.5% All3Media International’s revenues were up 4% to £49m for the year ending August 2014. Staples Midsomer Murders and Undercover Boss were its top titles, but Australian drama Miss Fisher’s Murder

Peaky Blinders: EWD 18 | Broadcast | 26 September 2014

Schitt’s Creek: ITVS GE

Mysteries came in at number three.

Other Aussie dramas that have done the business for the company include Love Child and Anzac Girls.

All3Media International’s pro­ portion of non-UK content has increased dramatically in the past year, to 29% of the total slate.

Even so, it is still a big investor in homegrown drama. Examples include The Missing, which will be a headliner at Mipcom, and upcoming 10-part Channel 4 drama Indian Summer.

The distributor has been one of the biggest beneficiaries of new opportunities to secure digital revenues (18% of its total). Under­lining that point are two major deals for C4 soap Hollyoaks: to Hulu in the US and SVTFlow in Sweden.

Like its major rivals, All3Media International has kept up its growth by offering buyers a diverse catalogue. This year, for example, it has found success with factual entertainment series Gardeners’ World and Love Your Garden, which it sold to markets including Australia, Scandinavia, Eastern Europe and Germany.

The talking point around parent company All3Media is its recent acquisition by a joint venture of Discovery Communications and Liberty Global. It’s too early to

know what the new owners are planning, though the initial indications are that All3Media – and presumably All3Media Inter­ national – will continue to operate under its own brand.

4= Endemol Worldwide Distribution 6.5% EWD has grown rapidly in recent years. Initially built around entertainment franchises, in the past couple of years it has expanded aggressively into scripted content.

Payne says: “Our studio business in the US has had a great start and this year will be delivering Kingdom for Direct TV alongside the fourth season of Hell On Wheels. We have a large amount of titles in active script development at a variety of US networks, some for pilot production and some direct to series.

“Meanwhile in the UK, we have acquired Artist Studios and we’re launching a venture with Charlie Brooker, while Tiger Aspect’s output for UK and international markets continues to grow.”

Other drama titles on the EWD slate include Gallipoli from Endemol Australia and a new season of Peaky Blinders. According

How Cities Work: Electric Sky

6= Electric Sky 6% Electric Sky is ever-present in our survey but this is the first time it has appeared near the top of the peer poll. Those who voted for the company praised it for staying true to its roots as a specialist factual distributor. Electric Sky isn’t afraid to experiment, however. It was an early entrant into the 3D market and has made a significant move into digital. The decision to open a Hong Kong office has also given the company greater access to Asia.

6= TCB Media 6% Sharing sixth place is TCB Media, now in its second year. According to chief executive Paul Heaney, the key to succeeding as a small distributor is “constantly refreshing the content pipeline and then making sure you invest in a big enough sales team to get out into the market and do the deals”.

He adds: “One of our big priorities is expanding the slate so we cover more of the factual and factual entertainment genres.

We’re in the market for shows that shout loud.”

World’s Most Extreme: TCB Media

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30 YEARS IN THE BUSINESS GLOBAL REACH WITH WORLDWIDE OFFICES INDEPENDENT AND FINANCIALLY SECURE PRODUCER FOCUSED SERVICE COLLABORATIVE PARTNER WELL-CONNECTED EXPERIENCED TEAM IMPRESSIVE SALES PERFORMANCE

www.beyonddistribution.com Michael Murphy: General Manager 0207 323 3444 Yvonne Body: Head of Acquisitions 0207 079 0451 Munia Kanna-Konsek: Head of Sales 0207 079 0459 41/42 Berners Street, London, W1T 3NB, United Kingdom

Distributors Survey 2014